The Gulf War (1990–1991) became a watershed event for Japan’s foreign policy, testing its readiness to address the challenges of the post-Cold War world. However, one can hardly say that Japan successfully passed this test. Despite substantial pressure from the United States and heated debates in the Diet and beyond it, Japan failed to make any contribution to the resolution of the crisis other than providing financial aid. Neither the plan to send peacekeepers to assist the U.S.-led coalition nor the proposal to dispatch JASDF aircraft for the evacuation of refugees were realized. The only “human contribution” Japan made was sending JMSDF minesweeper vessels to the Persian Gulf, but even this was done after the active phase of the hostilities was over. This severely harmed Japan’s image in the world and simultaneously served as stimulus for change, leading to Japan assuming a more active international role from the 1990s on. The present article focuses on the domestic political background of Japan’s reaction to the Gulf crisis. It shows how the factors including the political weakness of the prime minister, factional nature of the ruling party, the situation of the “twisted Diet,” where the LDP did not control the House of Councillors, as well as political opportunism of the opposition, insufficient support for the government’s proposals from public opinion, and the general focus on minor and technical details, rather than strategic foreign policy goals, combined to cause a paralysis of the decision-making mechanism. The study of this historical episode will, among other things, help us to better understand the roots of present-day Japanese foreign policy.